JPMorgan Chase agrees to pay $2B as settlement

NEW YORK: JPMorgan Chase, the US bank used by Bernard Madoff who masterminded the biggest fraud on record, has agreed to pay about $2 billion to US authorities to avoid litigation, press reports said on Monday.

Madoff masterminded a massive and long-running so-called Ponzi investment fraud which came to light in 2008 as the financial crisis gathered speed.

At the time of its collapse in 2008, Madoff Securities claimed that it had about $65 billion in client assets, whereas in fact it had only about $300 million.

The fraud ruined many investors and stoked public anger over the causes and consequences of the crisis.

Reports in the Wall Street Journal and the New York Times, citing people close to the matter, said that JPMorgan Chase would announce the settlement this week.

The Wall Street Journal said: “The bulk of the fines are expected to be routed to victims of Mr. Madoff.”

JPMorgan Chase, the biggest US bank by assets, was the main bank used by Madoff for more than 20 years.

The sources quoted by the two papers said that the bank had agreed to pay up to close criminal and civil investigations by federal authorities, which suspected that the bank had ignored signs that Madoff was operating a fraudulent scheme.

The New York Times said that the expected announcement would take to $20 billion the total amount paid by the bank in the last 12 months to settle various government investigations.

The paper noted that the bank had declined to comment on its report, but had insisted that all of its staff had acted in good faith.